Virginia Economy

Virginia's economy is well balanced with diverse sources of income, made up of 4.1 million civilian workers. In 2006, Forbes Magazine named Virginia the best state in the nation for business. The Gross Domestic Product of Virginia was $383 billion in 2007. As of 2000, Virginia had the highest number of counties and independent cities, fifteen, in the top one-hundred wealthiest jurisdictions in the United States based upon median income. As of 2007, seven Fortune 500 companies are headquartered in the Richmond area. Virginia has seventeen total Fortune 500 companies, ranking the state tenth nationwide.

Virginia has the highest concentration of technology workers of any state. One-third of Virginia's jobs are in the service sector. Computer chips became the state's highest-grossing export in 2006, surpassing its traditional top exports of coal and tobacco, combined. Northern Virginia, once considered the state's dairy capital, now hosts software, communication technology, and consulting companies. The Dulles Technology Corridor near Dulles International Airport has a high concentration of Internet, communications and software engineering firms. Fairfax and Loudoun counties in Northern Virginia have the highest and second highest median household income, respectively, of all counties in the United States as of 2006.

In Southside Virginia from Hampton Roads to Richmond and to Lee County, the economy is based on military installations, and cattle, tobacco and peanut farming. About twenty percent of Virginian jobs are in agriculture, with 47,000 farms, averaging 181 acres (0.28 sq mi/0.73 km²). Tomatoes surpassed soy as the most profitable crop in Virginia in 2006, with peanuts and hay as other agricultural products. Oysters are an important part of the Chesapeake Bay economy, but declining populations due to disease, pollution, and overfishing have diminished catches. Wineries and vineyards in the Northern Neck and along the Blue Ridge Mountains also have begun to generate income and attract tourists.

Many of Northern Virginia's well-educated population work directly for Federal agencies. Many others work for government contractors, including defense and security contractors. Well-known government agencies headquartered in Northern Virginia include the Central Intelligence Agency and the Department of Defense, as well as the National Science Foundation, the United States Geological Survey and the United States Patent and Trademark Office. The Hampton Roads area has the largest concentration of military bases and facilities of any metropolitan area in the world. The largest of the bases is Naval Station Norfolk. The state is second only to Alaska in per capita defense spending.

Virginia collects personal income tax in five income brackets, ranging from 3.0% to 5.75%. The sales and use tax rate is 5%. The tax rate on food is 2.5%. There is an additional 1% local tax, for a total of a 5% combined sales tax on most Virginia purchases and a combined tax rate of 2.5% on food. Virginia's property tax is set and collected at the local government level and varies throughout the commonwealth. Real estate is taxed at the local level based on one-hundred percent of fair market value. Tangible personal property also is taxed at the local level and is based on a percentage or percentages of original cost.